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Tyson Foods (TSN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Tyson Foods (TSN) closed at $84.75 in the latest trading session, marking a +0.4% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.31%. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 0.26%.

Heading into today, shares of the meat producer had lost 7.28% over the past month, lagging the Consumer Staples sector's loss of 1.53% and the S&P 500's gain of 1.18% in that time.

Investors will be hoping for strength from TSN as it approaches its next earnings release, which is expected to be February 6, 2020. The company is expected to report EPS of $1.70, up 7.59% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $11.11 billion, up 9.04% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.75 per share and revenue of $46.37 billion. These totals would mark changes of +23.63% and +9.34%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TSN. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TSN currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, TSN is holding a Forward P/E ratio of 12.51. Its industry sports an average Forward P/E of 12.6, so we one might conclude that TSN is trading at a discount comparatively.

Investors should also note that TSN has a PEG ratio of 1.09 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Food - Meat Products stocks are, on average, holding a PEG ratio of 1.09 based on yesterday's closing prices.

The Food - Meat Products industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 21, which puts it in the top 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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